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Millennials, also known as Generation Y, are the demographic cohort following Generation X. Millennials are generally considered to be those who were born between 1980 and 2000 and are coming of age in a tough economic climate. In the U.S., young adults (ages 18-33) are currently experiencing record-high unemployment rates and an increasing cost of living that is locking many of them out of the housing market. The cost of living crisis facing young people today is a complex issue with many contributing factors, but there is something we can do about it now. Here’s why millennials continue to struggle with financial stability, along with ways you can help protect your children from this uncertain future:
High Unemployment Rates for Millennials
Although the unemployment rate for all age groups has been declining since 2010, the same cannot be said for millennials. In fact, the unemployment rate for all other age groups has, on average, decreased by 2.5 percent since 2010, while the millennial unemployment rate has increased by 3.2 percent—almost double. One possible explanation for this is that millennials are frequently switching jobs to find better work-life balance and higher pay. This might be a good strategy for individuals, but it is damaging to the economy because it creates instability and contributes to the skills shortage.
Record-High Costs of Living for Millennials
While older generations benefited from a period of low inflation during the early 2000s, millennials are facing the highest inflation rates since the 1970s. To put this into perspective, the average monthly rent on a one-bedroom apartment in the U.S. has gone from $781 in 2004 to $1,296 in 2018. This inflation is driven in part by the rising cost of oil, which has quadrupled in price over the last decade. This, along with a period of low growth in the global economy and a rising demand for housing, has driven the cost of goods and services up across the board. While it’s true that every generation has been affected by inflation to some degree, millennials have been hit harder by it than any other group. They have also had significantly less time to adjust their lives to account for it.
Millennial Struggle With Student Loans
Millennials are the demographic group with the highest average student debt in American history. The average amount of student debt for millennials with a bachelor’s degree is $37,000, and millennials with a graduate degree carry an average student loan balance of $59,000. At the same time, millennials have the lowest average credit score of any generation. This combination of high student loan debt and low credit scores is making it extremely difficult for millennials to gain access to affordable mortgage loans. This has led some economists to predict that the millennial-driven housing slowdown will continue for years to come.
Millennial Struggle with Homes and Cars
The most striking evidence of the millennial cost-of-living crisis can be found in the housing and car markets. The average cost of a new car in the U.S. has gone up by more than $10,000 since 2004. Meanwhile, the average cost of a house has increased by more than $200,000. These rising costs have made it impossible for many millennials to access the housing and car markets. In fact, millennials are currently spending the most on rent of any generation, and they are more likely to be living with their parents than any other demographic. This may be due in part to the fact that millennials are now the parent generation.
The millennial cost-of-living crisis is real, and it is serious. The current generation of young adults faces unique challenges that previous generations did not, and it will take a concerted effort to overcome them. Fortunately, we can begin to address the cost-of-living crisis facing millennials now by educating ourselves on the issues that are affecting them the most. When we understand what our peers are facing, we can help to support them in different ways. Whether that means sharing information online or volunteering in your community, there are ways you can help ease the cost-of-living crisis facing millennials.